The Malaysian Insider

By Debra Chong

KUALA LUMPUR, Aug 29 – Diesel vehicles, which has long suffered from a bad reputation in this country, is getting a boost in Budget 2009. The Government will reduce the road tax on private passenger vehicles with diesel engines to be the same as those with petrol engines, effective Monday

Although diesel cars used to be noisy and smoky, you can hardly tell the difference between a diesel and petrol car these days. And you getter better mileage with diesel.

This sweetener from the government opens up the market for people looking to buy a new car. "Oh, it's welcome news," said K. Sudha, 34, a car enthusiast.

While he acknowledges that the diesel currently available at local pumps is of a lower grade and less suitable for the latest high-end diesel-powered cars rolling out, the new Budget proposal works in his favour.

"The basic reason is that diesel gives better mileage. The downside is maintenance. But in the long run, it's good news," he said.

“If I already have a diesel-powered engine, I pay a lower road tax. If I want to buy a new car, I still pay a lower road tax. Currently, the road tax for a normal 2.5-litre diesel engine is around RM1,000-plus.

“Comparatively, a petrol-powered car of the same capacity costs only RM800."

But he still thinks vehicle road tax should have been abolished. "To be honest… the government should give us tax rebates based on toll payments in our income tax assessments. I won't be surprised that an average working individual in the Klang Valley pays above RM3,000 in toll charges annually. I know because I do and 80 per cent is not claimable under employment benefits."

Meanwhile, Malaysia's No. 1 motoring blogger Paul Tan said, "It's about time. There's no justification for having a higher road tax for diesel engines in the first place." He also noted that this may not encourage the carmakers to bring in the newer diesel-engine models into Malaysia though.

"No use," he quipped. The reason? " Because of the fuel itself. The modern cars cannot take our diesel. Our diesel is low quality," he explained.

At the end of the day though, the diesel road tax gift from the government is a case of "better than nothing".